What is Whole life insurance?
A whole life insurance policy or permanent life insurance provides life coverage until the death of the policyholder. The policy stays its life as long as the policyholder pays the premium. The sum assured or the coverage is decided at the time of policy purchase and is paid to the nominee at the time of death of the policyholder. The maturity age of whole life insurance is 100 years. If the policyholder dies before the age of 100 years, the nominee receives the sum assured.
Now, you may think this is similar to life insurance. But there is some difference between these two. Let us look at those to clarify your doubt.
Difference between Whole Life and Term Insurance
|Basis||Whole Life Insurance||Term Insurance Plan|
|Meaning||This is a type of life insurance product that provides you life cover for policyholder’s whole life||This is a type of life insurance that provides you life cover for a specific period or ‘term’|
|Duration||Up to 99 years||For a specific duration for example, 5 years, 10 years, etc|
|Maturity Benefit||Yes, Whole life Insurance provides maturity or survival benefit||No, the only death benefit is provided|
|Purpose||It acts as an insurance and an investment product||It only provides life insurance|
|Cash Value||Builds cash value||No|
|Loan Facility||The loan can be taken against the policy||Loan facility not available|
Why should you buy Whole Life insurance
(i) Financial Security
The primary benefit of a whole life insurance policy is that it provides long time financial support to the policyholder’s family in case of any unfortunate event with the policyholder.
(ii) Death Benefit
In case of any unfortunate event with the policyholder, the Insurance company provides financial protection in form of a death payout. The registered nominee receives the entire sum assured plus the bonus accumulated over time.
(iv) Maturity Benefits
Some insurance policies offer a maturity profit at the end of the policy term in case the life assured has survived the whole policy tenure. The maturity profit below an insurance policy helps an individual to meet his/her money goals over a period of your time
Some whole life insurance plans give you Guaranteed Returns after a specific term. That helps you to get your dream come true events like a child’s higher education, a son or daughter’s marriage, building your dream house and other expenses.
Whole Life insurance Savings cum investment plans such as endowments plan, ULIPs, and Moneyback plan these plans are Provides you with Both Investment Plans and life insurance
Whole Life insurance premiums are eligible for a tax deduction of up to Rs. 1.5 Lakh under Section 80C of the Income Tax Act 1961. Also, the payout received from an insurer is exempt from tax u/s 10(10D) of the Income Tax Act and the premium amount paid for riders such as critical illness can be claimed u/s 80D
Riders such as accidental death benefit, Premium waiver benefit, critical illness, Terminal illness rider, daily hospital cash benefit, Surgical care rider benefits, accidental disability rider and Income benefits are add-ons to your current Core life insurance plan, which help customize the policy according to your specific needs.
(ix)Flexible premium payment option
Insurance holders can choose the frequency of premium payments as per their needs like monthly, quarterly, half-yearly, or yearly.
Some whole Life insurance plans give a monthly pension to the policyholder plan for their retirement
Some whole life insurance plans offer loans against the policy feature which can help an individual to fulfill urgent financial requirements such as treatment for medical emergencies or help an individual to fulfill financial obligations which cannot be avoided.
Whole Life insurance is a long-term savings product, it also ensures that the insurance holders focus on long-term returns rather than focusing on risky investment decisions that could provide short-term profits.
Whole Life insurance provides financial protection to beneficiaries or through investment options like ULIPS, endowments, etc that are used for Long term investment.
What benefits will you get on buying whole life insurance online?
If you are confused, about whether you should buy whole life insurance policy online or offline, then have a look on the benefits you will get while buying it online.
1. Plenty of options: – While taking whole Life insurance online, you will get plenty of options in a single place. You do not have to travel to the offices of different companies or to the agents. Simply you have to open your mobile, laptop or tab; whatever you have and search for the best whole life insurance policy providers. After checking all the facilities, they are providing you can buy the best policy which suits your conditions.
2. Easy to compare: – As you get the list of all whole life insurance provider agencies in one place and services, you can compare them easily and can buy the best policy which is fit for your requirements.
3.No middlemen or agents: – because of online whole life insurance, there is no need for agents anymore. Companies sell their policies directly to the customers. This makes the process faster. Also, the policy cost also decreases, as the company does not have to pay any agent to sell their policies and the number of paperwork also decreases, again reducing the premium cost.
4. Transparency: – While buying whole life insurance online, companies provide all their detailed terms and conditions on their website. Even top insurance broker websites like policybazaar.com provide policies for many companies. So, you do not have to visit many websites. On a single website, you can compare them all.
As there is no middleman involved, no information will be hidden from customers for selling a particular policy. So, you can buy a policy only after comparing all the companies and after getting all the information.
5. Online Reviews: -Company websites provide reviews of their current policyholders. This can help you to get the proper fit policy according to your requirements. While buying a policy offline, this information you cannot get, as you cannot visit all the policyholders physically.
6. Full clarity about the policy: – here you will get full information about the policy you are going to purchase. No agent is there to hide the information from you to sell the policy. Already existing customers’ review also helps you to take the right decision. If you are still not satisfied, many policy providers have live chat facilities on their website, where you can clear all your doubts by talking to customer support.
7. Advance Insurance quote: – After filling in some details like your age, name and bad habit and education, etc. on the website, the company will send you whole life insurance quote instantly, which contains details about coverage and premium that you have to pay. You can buy the policy only if you are satisfied completely with all the conditions.
8. Less time taking: – As you do not have to go anywhere while buying the policy, for paying the premium, or for getting any information; it is very less time taking than offline policy buying.
9. More convenient: -It is more convenient to buy the policy online than to buy it offline because here you can do the inquiry anywhere in your comfort zone and at any time when you are free. There is no time bound.
10. Information available 24X7: – All the required information is available 24/7. You can get all information at any time, as you do not have to visit there physically.
11. Low premium: -As there is no need of any agent, no commission has to be given to them. Also, less paperwork is needed and the company saves on postal charges and other office expenses while selling policies online. So, the premium amount also reduces significantly while purchasing whole life insurance online.
12. Discounts: – Many companies give discounts to customers, who buy whole life insurance online from their website. This also allows you to buy the same policy with a lower premium value.
13. Instant policy activation: -Here your policy will be activated instantly after filling in some details on the company’s website. You do not have to wait for processing for long.
14. Safe Transaction: -If you are getting second thoughts, on whether to buy online or not due to the security threat in an online transaction, then do not worry at all. Here your money is completely safe. You have to do only one thing which is to check, whether the company is approved by IRDAI (Insurance Regulatory and Development Authority of India) or not.IRDAI registers the company which is safe and has saved transaction modes.
15. Pre and post-sell service: – When you buy whole life policy online, the company provides you with a premium calculator, by which you can calculate the premium amount which you have to pay. Again, after buying, the company will send the premium receipt, soft copy of the policy bond and premium renewal reminder online.16.No geographical limitation: – As you do not have to visit the office, the location of the company does not at all affect your purchase. You can buy whole life insurance policy from any company present in any geographical location.
Why should you compare whole life insurance online?
You must have got some idea about why should you buy whole life insurance online. Because it is more convenient, you will get more options, the premium amount will be reduced, and many more benefits. Now, let us know about it in detail.
1. It is easy and convenient: – Comparing whole life insurance online is very easy. Because you have to just search on Google and you will get a list of all the insurance companies available. Then you can check all your requirements, compare them and finally take the best policy according to your requirement.
Again comparing whole life insurance online is convenient. Because you do not have to go anywhere. You can check the authenticity of the companies and compare them in the comfort of your home. Hence it is also less time taking.
2. It is free and you can do it anytime: – You do not have to spend a single penny to compare whole life insurance online. Because you do not have to go anywhere for this. Also, you can do it any time, as you can search for all the companies just sitting at your home.
3. To get a better and more affordable premium: – You can compare more companies while comparing them online. Hence, you can get better whole life policies as compared to comparing the policies offline. Again, while comparing the different policies, no agent is involved. So, expenses related to the agent will be reduced. Also, other paperwork-related expenses will also be reduced. Hence, the overall premium the amount that will decrease.
4. To get the required plan: – While comparing the whole life policy online, you will get all the information about the policy. So, according to your requirement, you can buy the right policy. While searching offline, you cannot do this as there you will not get these many options to compare.
5. To get additional benefits: – When your compare the whole life policies online, no points will be left out. So, you may know about some benefits as compared to offline.
6. To take a more informed decision: – While comparing whole life insurance online, as you are getting all about the terms and conditions, you can take a more informed decision.
7. To take the right add-ons: – During the online comparison, you will get to know about all the add-ons, the companies are providing. So, you can choose the right add-ons which are required for you. Hence, you can save yourself from unnecessary expenses.
Types of Whole Life Insurance:
There are various types of whole life insurance plans available in India, such as
Participating Whole Life Insurance: Participating whole life insurance policy is also a traditional life insurance plan. Participating in a whole life policy offers bonuses to the policyholder. In participating whole life insurance, the premium paid by the policyholder is invested by the company; the profit earned through the investment is paid as bonuses to the policyholder.
Non-Participating Whole Life Insurance: A non-participating whole life insurance policy is a traditional life insurance plan. It has a level premium, and the face amount is the same throughout your life. The cost of a non-participating whole life insurance policy is low, and fixed costs and relatively paying low premium payments. As a non-participating plan does not pay any bonus facility.
Level Premium Whole Life Insurance: In level premium whole life insurance, the policyholder pays the premiums throughout the life until death. Risk-benefit is for the entire duration of life, and the amount sum assured is paid after the policyholder’s death.
Limited Payment Whole Life Insurance: In Limited Payment Whole Life Insurance, the insured person must pay premiums for a limited period and receive lifetime protection. In this life insurance plan, policyholders must pay premiums for a specified number of years, like 10 years, 15 years, 20 years, etc.
SinglePremium Whole Life Insurance: In a single-premium whole life insurance plan, the entire premium of the life insurance policy is paid in a single lump sum and is considered an investment insurance product. In a single premium whole life insurance policy, a large sum assured amount is paid as a guaranteed payment to the policy’s beneficiary.
Indeterminate Whole Life Insurance: An indeterminate whole life insurance policy is a regular one. It offers policyholders the option of modifying their premiums. Based on its estimate of its current earnings, expenses and mortality, etc. If there are any changes, the insurer will charge policyholders the present premium amount.
Factors you should consider while buying a whole life insurance policy
Options for Riders:- Riders such as accidental death benefit, Premium waiver benefit, critical illness, Terminal illness rider, daily hospital cash benefit, Surgical care rider benefits, accidental disability rider and Income benefits are add-ons to your current Core whole life insurance plan, which help customize the policy according to your specific needs.
Claim Settlement Ratio:- This is the percentage of the total claims received during the financial year that the whole life insurance provider has settled.
The terms and conditions of the policy:- There are other terms and conditions of whole life insurance policy that you need to consider as a policyholder.
Claim Process: – You must check the claim process before buying whole life insurance policy. Simple the process, the faster you can pass your claim. So, it is better to buy a policy with a simpler claim process.
Eligibility criteria for buying whole life Insurance policy
|Minimum age at entry||18 years|
|Maximum age at entry||65 years|
|Maturity age||99 years|
|Who can Purchase?||Young individuals, Newly Married, Parents, Senior Citizen|
|Add-ons or Rider||Waiver of PremiumAccidental deathPermanent or partial disabilityFamily Income benefit And, critical illness|
|Documents Required||Photo Identity Address Proof Age ProofIncome Proof|
Documents required for buying a Whole life Insurance policy
Here is the list of documents you require to submit while buying a whole life insurance policy
Age Proof (Any one of the below)
- Birth Certificate
- Aadhaar Card
- Voter ID Card
- PAN Card
- Driving Licence
- Marriage Certificate
- Ration Card
Identity Proof (Any one of the below)
- Aadhaar Card
- PAN Card
- Voter ID Card
- Address Proof
Address Proofs (Any one of the below)
- Aadhaar Card
- Voter ID Card
- Ration Card
- Driving License
- Passbook with 6 months of latest entries
- Bank statement of savings account
- Latest 3 months of utility bills
Income Proof (Any one of the below)
For Self-employed (Any one of the below)
- 2 Year of COI(Computation of income) and ITR
- Form 26AS
For Salaried persons (Any one of the below)
- Salary Slip for last 3 months
- Last 3 months’ Bank Statements
- Form 16
- Apart from KYC documents, a few other documents are required when applying life insurance policy. Following is the list of other documents required at the time of policy application:
- Application/Proposal Form
- Passport Size Photographs
- Recent Medical Examination/Reports
- Policy Declaration in case the life insured still needed to fill out the proposal form.
- Apart from all these, some insurers may ask for other documents according to their requirements.
Claim process of whole life Insurance policy
Buying a whole life insurance policy is half the battle won. You and your family members need to be aware of the whole life insurance claim process.
How to File a Claim on Death?
In case of the policyholder’s unfortunate death, the family members/beneficiaries/nominees must inform the insurer as soon as possible. Delaying things will only make it difficult at the time of claim settlement. You can do the same via:
Online mode – Visit the official website of the insurance company and intimate a claim.
Phone Banking – Contact the insurance company via phone banking or email.
Branch mode– Physically visit the bank branch or Insurance office with the relevant documents.
- Claim Intimation:
- Upload Supporting Documents:
- Claim Settlement:
Whole life insurance FAQ
What is Whole life insurance?
A whole life policy is a type of life insurance that provides guaranteed death benefits during the policyholder’s life. In whole life insurance, the coverage is provided until the policyholder’s death or till 99 years of age. Since the coverage is for an entire lifetime, it is known as Whole life insurance.
Why Whole life insurance a good option?
In whole life insurance, the coverage is provided until the policyholder’s death or till 99 years of age. Some companies provide maturity benefits if policyholders survive the policy term. Thats why whole life insurance policy is a good option.
What is the Eligibility Criteria to Buy Whole Life Insurance?
The life insurance policyholder should be financially independent and above the age of 18 years. The maximum entry age is 60 to 65 years of age.
Which is a better whole life or term life insurance?
In whole life insurance, the coverage is provided until the policyholder’s death or till 99 years of age. Since the coverage is for an entire lifetime, it is known as Whole life insurance. While the term insurance plan has a particular period for which the coverage is offered, the whole life insurance policy is covered for the policyholder’s lifetime.
Can I take a loan from my whole life insurance policy?
After the completion of 3 years of policy, the policyholder can avail loan against the whole life insurance policy
Term insurance plan can be converted to a whole life insurance policy?
Yes. You can convert a term insurance policy to a whole life insurance policy as long as the conditions of the policy have been understood and the premium payments have been timely. It also depends on whether the term insurance plan you hold allows you to convert it into a whole life plan.
Are there any riders available with Whole Life Insurance?
Yes, most life insurance companies offer riders under a whole life insurance plan. There are many different riders available; however, the most common ones are:
Accidental Death Benefit rider
Accidental Total and Permanent Disability rider
Waiver of premium rider
Critical illness rider
How can I pay the premium after I retire?
You don’t have to pay premiums. The premium payment term is usually over by the time one officially retires.
What is the maximum amount I can avail as tax benefit?
As per Section 80C of the income tax act, 1961, all the premiums paid towards the policy are tax exempted upto Rs.1,50,000.
Is Whole Life Insurance an asset?
Yes, Whole life insurance is an investment asset that can help you transfer the wealth to the next generation.
What are Death Benefits under a whole life insurance policy?
An insurance carrier will give a total death benefit for the amount insured if the policy is effective and the premiums are up to date.
What if I surrender the Whole Life Insurance policy?
In this case, the Insurance company provide you surrender value after deducting some charges that vary from insurer to insurer.
Is Whole Life Insurance suitable for senior citizens?
No. But, if purchased early in life, it helps in retirement planning.
Will the whole life insurance policy premium change as I grow older?
No, it will not change, and the policy premium will remain the same until it expires.
Is it necessary to buy a rider with whole life insurance?
No, buying a rider with whole life insurance plans is not compulsory. Riders are provided optional benefits that a policyholder can add to their base policy to enhance their policy.
Is suicide covered under whole life insurance?
Generally, Suicide is not covered under whole life insurance. In case a policyholder commits suicide within 12 months of the insurance date of the policy, the nominee receives 80% of the total premium paid till the date of death after deducting taxes or charges.
What is the Grace period in a whole life insurance policy?
Per the IRDAI, every insurance company offers a grace period of 15/30 days(30 days for yearly, half-yearly, and quarterly premium payment modes and 15 days for monthly premium payment modes). A policyholder can pay their due premiums within that period; otherwise, the policy will lapse.
What if my policy has lapsed?
If you cannot pay the due premiums within the grace period, the policy will lapse, and all benefits will be terminated. You must pay the insurance company all the arrears to revive your policy. Some insurance asks for a medical certificate at the time of revival.
Can an NRI buy whole life insurance?
Yes, the Life insurance company offer whole life insurance plans specially designed to fulfil the needs of NRIs.
I occasionally smoke with my friends. Do I need to disclose this information while buying whole life insurance?
If you have smoked in the past 12 months, you must disclose it to your insurance provider. If you don’t disclose it right away and reveal it later, you may be charged a high premium, or your provider may cancel your policy (denying any benefits)
Will insurance company cover murder in the whole life insurance policy?
There are two different cases of such a situation.
The insurer will not settle the claim if the policyholder is murdered and investigations reveal the nominee was involved in the crime.
If the policyholder’s death is due to involvement in criminal activity, the insurer will not settle the claim.
I have diabetes. Can I get myself insured under whole life insurance?
If your diabetes is in control (with regular treatment and a healthy lifestyle), you will be eligible to buy a whole life insurance policy. However, your application can be rejected if you have additional risks like hypertension, heart illness, etc.
What happens if I discontinue paying the premiums?
If you discontinue paying the premium, the policy will lapse after the grace period.